While the federal government’s proposed amendments to Canada’s patented medicines regulations are aimed at reducing the cost of prescription drugs, they risk limiting patient access to new, innovative medications, according to a new report by the Fraser Institute.
“Establishing drug prices has always been a balance between affordability and accessibility, but by markedly shifting the scales towards lower prices, Canadian patients will likely have less access to life-saving drugs,” said Kristina Acri, a senior fellow at the think tank and author of the report, in a press release.
Read: Feds propose regulatory changes to reduce costs of prescription drugs
The proposed amendments to the Patented Medicine Prices Review Board regulations, put forward by the government in a consultation process in May 2017, include an update of the reference countries Canada uses to compare its prices internationally. The list currently includes Britain, France, Germany, Italy, Sweden, Switzerland and the United States. The government is proposing removing the latter two countries in favour of adding Australia, Belgium, Japan, the Netherlands, Norway, South Korea and Spain.
The upshot of this amendment is that the group of comparator countries would help push down the highest prices for drugs, creating a new maximum for Canadian pricing and ultimately requiring pharmaceutical companies to charge less, noted the report.
Further, the proposed changes would introduce new criteria for whether a drug is sold at an excessive price. In order to determine what constitutes an excessive price, the government suggested new drugs would be analyzed by the Canadian Agency for Drugs and Technologies in Health. Notably, drugs above the threshold risk not being insured, according to the report, which pointed out that sure a threshold isn’t specified in the proposed regulation changes.
Read: Canada second-highest spender on generic drugs among OECD countries: report
The regulations would also be amended so all patentees would need to report indirect price reductions, promotions, rebates, discounts, refunds, free goods, free services, gifts or any other benefit in Canada to the Patented Medicine Prices Review Board. This could discourage manufacturers from offering rebates, thus raising the overall costs of public drug plans, because the rebates would then be included in the information the board uses to calculate a drug’s actual price, noted the report. Making the overall price of a drug appear lower would decrease the maximum price for new drugs, which could discourage the rebates in the first place, it suggested.
“The proposed changes clearly disincentivize innovative drug launches in Canada, potentially de-prioritizing Canada in the global launch sequences for new drugs,” Acri wrote in the report. “Moreover, the increasing reporting requirements represent an unnecessary regulatory burden and would increase the time to achieve public reimbursement.
“Such significant changes should not go without thoughtful examination, though in this case that appears lacking. Quite simply, rather than bolstering the Canadian health-care system, the proposed changes only serve to undermine it.”
Read: PMPRB findings on generic drug prices out of date: CGPA